(Bloomberg) -- Zambia, which the International Monetary Fund has warned is at high risk of debt distress, contracted an additional $2.6 billion of new external loans last year, according to the Finance Ministry.

If the funds are disbursed, they’ll increase the southern African nation’s external debt to $12.7 billion, from $10.1 billion at the end of 2018. The new loans suggest the government is too complacent about rapidly increasing debt risks, Gregory Smith, fixed-income analyst at Renaissance Capital in London, said by email Thursday.

“Last year, the government pledged it would be canceling loans and slowing down the accumulation of debt,” he said. “Adding more new loans is only going to aggravate what is already a dire situation.”

A spokesman for the Finance Ministry didn’t respond to an emailed request for comment.

Zambia’s foreign-exchange reserves have plunged from a peak of almost $4 billion in 2015 to $1.4 billion in February as foreign-debt servicing costs soared. Yields on the country’s $1 billion Eurobonds due in April 2024 jumped 69 basis points to 18.09 percent by 5:31 p.m. in Lusaka.

Africa’s second-biggest copper producer has boosted spending on infrastructure including roads and airports in recent years, which it has largely financed through external borrowing. The projects are an investment for the future, according to Finance Minister Margaret Mwanakatwe. Foreign debt has more than doubled since 2014, and the cost of servicing it will increase by 90 percent this year, according to Smith.

While analysts including him are concerned about the possibility of default in 2020 and in subsequent years, the government has dismissed these worries, saying that the country has never defaulted before.

“Avoiding default in our view will require canceling some loans, not adding them, plus some combination of an IMF financed program, Chinese debt re-profiling, and a People’s Bank of China credit line,” Smith said. “Debt sustainability would require a u-turn on most of the loans signed in 2018.”

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